Wrap Text
Interim unaudited results for the six months ended 31 December 2015
Pan African Resources PLC
(‘Pan African Resources’ or the ‘company’ or the ‘group’)
(Incorporated and registered on 25 February 2000 in England and Wales under the Companies Act 1985,
registration number 3937466)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
Interim unaudited results for the six months ended 31 December 2015
Key features reported in South African Rand (‘ZAR’) and Pound Sterling (‘GBP’)
- Group earnings in ZAR terms increased by 129.4% to ZAR227.6 million (2014: ZAR99.2 million).
In GBP terms, group earnings increased by 98.2% to GBP10.9 million (2014: GBP5.5 million)(note 1).
- Group revenue increased by 29.4% to ZAR1,575.4 million (2014: ZAR1,217.4 million).
- Group gold sales increased by 17.4% to 101,797oz (2014: 86,675oz).
- Effective ZAR gold price received increased by 11.7% to ZAR485,215/kg (2014: ZAR434,403/kg).
- All-in cost per kilogramme decreased to ZAR397,692/kg or USD910/oz (2014: ZAR453,068/kg or USD1,283/oz),
due to improved gold production and lower expansionary capital.
- All-in sustaining cost per kilogramme decreased to ZAR396,819/kg or USD908/oz (2014: ZAR411,384/kg or
USD1,165/oz).
- For the 2015 financial year, the group paid a dividend of ZAR210 million or GBP9.7 million
(2014: ZAR258 million or GBP14.9 million), equating to ZAR0.1147 per share or 0.53p per share
(2014: ZAR0.1410 per share or 0.82p per share).
This payment was made on 24 December 2015.
- Substantial improvement in the group net debt to ZAR345.8 million (GBP15.0 million) from the
ZAR458.6 million (GBP25.4 million) in December 2014.
- The group is pleased to report no fatalities in the reporting period (2014: no fatalities).
- The group is well positioned to sustain attractive final dividend payments.
For the six months For the six months
ended 31 December ended 31 December
Metric 2015 2014 Movement
Revenue (ZAR millions
- GBP millions) 1,575.4 75.6 1,217.4 68.1 29.4% 11.0%
Average gold
price
received (ZAR/kg – USD/oz) 485,215 1,110 434,403 1,231 11.7% (9.8%)
Cash costs (ZAR/kg – USD/oz) 323,730 740 351,461 996 (7.9%) (25.7%)
All-in
sustaining
costs (ZAR/kg – USD/oz) 396,819 908 411,384 1,165 (3.5%) (22.1%)
All-in costs (ZAR/kg – USD/oz) 397,692 910 453,068 1,283 (12.2%) (29.1%)
Adjusted
EBITDA (note 3) (ZAR millions
- GBP millions) 418.7 20.1 230.6 12.9 81.6% 55.8%
Attributable (ZAR millions
earnings - GBP millions) 227.6 10.9 99.2 5.5 129.4% 98.2%
Earnings per
share (‘EPS’) (cents - pence) 12.43 0.60 5.42 0.30 129.3% 100.0%
Headline earnings
pershare
(‘HEPS’) (cents - pence) 12.43 0.60 5.61 0.31 121.6% 93.5%
Net debt (ZAR millions
- GBP millions) 345.8 15.0 458.6 25.4 (24.6%) (40.9%)
Total sustaining
capital (ZAR millions
expenditure - GBP millions) 100.1 4.8 114.9 6.4 (12.9%) (25.0%)
Total capital (ZAR millions
expenditure - GBP millions) 128.9 6.2 214.6 12.0 (39.9%) (48.3%)
Net asset value
per share (cents - pence) 150.4 7.0 143.4 8.2 4.9% (14.6%)
Weighted average
number of
shares in issue (millions) 1,831.5 1,831.5 1,830.0 1,830.0 0.1% 0.1%
Average exchange
rate (ZAR/GBP – ZAR/USD) 20.83 13.60 17.87 10.98 16.6% 23.9%
Closing exchange
rate (ZAR/GBP – ZAR/USD) 22.99 15.53 18.03 11.60 27.5% 33.9%
Cobus Loots, CEO of Pan African Resources commented: “We are delighted to announce a much improved operating
and financial performance, underpinned by the stronger prevailing ZAR gold price environment. We delivered
important operational improvements at Evander Mines, with gold sales and revenue increasing significantly.
The Evander Mines Tailing Retreatment Plant has assisted our production growth and continued focus on
low-cost, high-margin gold ounces. The performance in this period is a testament to our quality assets and
dedicated workforce and management. The group is well positioned to produce approximately 200,000oz and
9,000oz of gold and PGEs respectively, over the full year period.
Cash generation increased greatly during the period and is a key benchmark of our success, allowing us to
substantially reduce our net debt position and improve our overall finances. As a result, the company
remains well positioned to maintain its sector-leading dividend pay-out and take advantage of future
growth opportunities.”
Operational
Barberton Mines Proprietary Limited (‘Barberton Mines’) (note 5)
- The operation reported no fatalities (2014: no fatalities).
- Average underground head grade of 10.9g/t (2014: 11.6g/t).
- Gold sold increased by 6.6% to 56,447oz (2014: 52,942oz).
- Revenue increased by 19.6% to ZAR854.3 million (2014: ZAR714.3 million), as a result of the improved
gold sales and the higher effective ZAR gold price.
- Cash cost per kilogramme decreased by 4.5% to ZAR266,690/kg (2014: ZAR279,150/kg), due to improved gold
ounce production.
- All-in sustaining cost per kilogramme increased by 5.7% to ZAR349,218/kg (2014: ZAR330,340/kg). The
increase was mainly as a result of an unrealised derivative cost collar mark to market fair value
adjustment of ZAR40.6 million, which was revalued at 31 December 2015 following the depreciation of the
ZAR/USD exchange rate.
- All-in cost per kilogramme increased by 3.5% to ZAR349,739/kg (2014: ZAR337,814/kg).
- Adjusted EBITDA increased by 31.7% to ZAR310.1 million (2014: ZAR235.5 million)(note 3).
- Capital expenditure was unchanged at ZAR55.9 million (2014: ZAR55.9 million).
- Effective from 1 July 2015, the life of mine was increased to 20 years (2014: 19 years) due to the down
dip extension of the high grade 11 Block of the main reef complex ore body by a further 170 metres.
This has resulted in an annual increase in Barberton Mines’ mineral reserves by 236,162oz.
Evander Gold Mining Proprietary Limited (‘Evander Mines’) (note 5)
- The operation reported no fatalities (2014: no fatalities).
- Underground head grade improved to 5.8g/t (2014: 4.3g/t), principally due to mining at 8 Shaft’s newly
established 25 level.
- Gold sold increased substantially by 34.4% to 45,350oz (2014: 33,733oz), due to the underground mining
operations increasing production to 36,370oz (2014: 26,024oz), while the Evander Mines Tailing Retreatment
Plant (‘ETRP’) provided an additional 3,708oz (2014: Nil) from tailings sources. Surface sources and
surface feedstock material produced 5,272oz (2014: 7,831oz), following a reduction in the available surface
tonnages to process.
- Revenue increased by 49.3% to ZAR682.0 million (2014: ZAR456.8 million) as result of improved gold
production and an increase in the effective ZAR gold price.
- The ETRP produced 3,708oz of gold at 0.3g/t from tailing sources at a higher than expected recovery
of 49% (forecasted recovery of 42%).
- Cash costs per kilogramme decreased by 15.1% to ZAR394,730/kg (2014: ZAR464,955/kg), due to improved
gold production from the ETRP and higher grades mined at 8 Shaft.
- All-in sustaining cost per kilogramme decreased by 15.3% to ZAR456,070/kg (2014: ZAR538,584/kg), in
line with the decrease in cash costs per kilogramme.
- All-in cost per kilogramme decreased by 27.9% to ZAR457,380/kg (2014: ZAR633,960/kg), due to once-off
ETRP expansionary capital of ZAR88.3 million during the prior reporting period.
- Adjusted EBITDA increased to ZAR124.2 million (2014: ZAR6.2 million) (note 3).
- Capital expenditure incurred was ZAR71.9 million (2014: ZAR157.6 million).
- Effective from 1 July 2015, the life of mine was 16 years (2014: 17 years).
Phoenix Platinum Mining Proprietary Limited (‘Phoenix Platinum’)
- Phoenix Platinum’s profitability and cash generation decreased during the reporting period due to a
curtailment in current arisings from International Ferro Metals (SA) Proprietary Limited’s (‘IFMSA’)
Lesedi mine, following the initiation of business rescue proceedings by IFMSA. Tonnages processed were
also adversely impacted by the drought and associated water shortages affecting re-mining and processing.
The lower platinum group elements (‘PGE’) price environment further affected the operation’s profitability.
- Phoenix Platinum’s earnings decreased to ZAR0.1 million (2014: ZAR7.3 million).
- PGE production decreased by 4.6% to 4,493oz (2014: 4,711oz) (note 2).
- Revenue decreased by 15.2% to ZAR39.2 million (2014: ZAR46.2 million) due to lower tonnages processed
as result of the operational challenges highlighted above and the lower effective PGE net revenue price
received of ZAR8,716/oz (2014: ZAR9,815/oz).
- The average PGE net revenue price received decreased by 11.2% to ZAR8,716/oz (2014: ZAR9,815/oz) (note 4).
- Cost per tonne increased by 24.2% to ZAR293/t (2014: ZAR236/t), mainly due to tonnages processed
decreasing by 13.6% to 117,461t (2014: 135,963t).
- Cost per ounce of production increased by 12.3% to ZAR7,653/oz (2014: ZAR6,817/oz).
- Adjusted EBITDA decreased to ZAR2.9 million (2014: ZAR13.5 million) (note 3).
- Capital expenditure incurred was ZAR0.8 million (2014: ZAR0.1 million).
- Effective from 1 July 2015, the life of operation was 28 years (2014: 28 years).
Notes:
1. Refer to the statement of comprehensive income for a reconciliation of profit after taxation to
headline earnings.
2. PGEs are platinum, palladium, rhodium, iridium, ruthenium and gold.
3. Adjusted EBITDA is represented by earnings before interest, taxation, depreciation and amortisation,
impairments and loss on disposal of associate.
4. Phoenix Platinum’s average PGE net revenue price received represents the value received per ounce post
refining and is therefore disclosed as net of refining charges.
5. Combined underground and tailings operations. Nature of business Pan African Resources is a
mid-tier African-focused precious metals producer with a production capacity in excess of 200,000oz
gold and 12,000oz of PGEs per annum. The group’s operating assets include:
- Barberton Mines : three gold mines and the Barberton Mines Tailing Retreatment Plant (‘BTRP’)
in the Mpumalanga province;
- Evander Mines : a gold mine and the ETRP in the Mpumalanga province; and
- Phoenix Platinum : a Chrome Tailing Retreatment Plant (‘CTRP’) in the North West province.
Pan African Resources’ growth strategy is aimed at identifying and exploiting mining opportunities at margins
that create stakeholder value by driving growth in its earnings, cash flows, production and in its mineral
reserve and resource base, and by capturing the full precious metals mining value chain.
The group is profitable and cash generative at prevailing gold prices, with the ability to fund all on-mine
sustaining capital expenditure internally and also meet its other funding and growth commitments.
Financial performance
Key external drivers of the group’s results
Exchange rates and their impact on results
All of the group’s subsidiaries are incorporated in South Africa and their functional currency is ZAR. The
group’s business is conducted in ZAR and the accounting records are maintained in this same currency, with
the exception of precious metal product sales, which are conducted in USD prior to conversion into ZAR.
The ongoing review of the results of operations conducted by executive management and the board is
also performed in ZAR.
The group’s presentation currency is GBP due to its ultimate holding company, Pan African Resources,
being incorporated in England and Wales and being dual- listed in the UK and South Africa.
In the period under review the average ZAR/GBP exchange rate was ZAR20.83:1 (2014: ZAR17.87:1) and the
closing ZAR/GBP exchange rate was ZAR22.99:1 (2014: ZAR18.03:1). The period-on-period change in the
average and closing exchange rates of 16.6% and 27.5%, respectively, must be taken into account for the
purposes of translating and comparing period-on-period results.
The group records its revenue from precious metals sales in ZAR, and the deterioration in the value of the
ZAR/USD exchange rate during the period had a compensating effect on the weaker USD metals revenue received.
The average ZAR/USD exchange rate was 23.9% weaker at ZAR13.60:1 (2014: ZAR10.98:1).
The commentary below analyses the current and prior period’s results. Key aspects of the group’s ZAR
results appear in the body of this commentary and have been used as the basis against which its financial
performance is measured. The gross GBP equivalent figures can be calculated by applying the exchange
rates as detailed above.
Commodity prices
During the period, the average USD gold and PGE basket prices achieved were substantially lower than
the previous period.
The group realised an average gold price of USD1,110/oz, a decrease of 9.8% from the average USD1,231/oz
achieved in the prior period.
The market PGE basket price (applying the Phoenix Platinum prill split) during the period decreased by
20.4% to USD859/oz (2014: USD1,079/oz). Phoenix Platinum’s average PGE net basket price received
decreased to USD641/oz (2014: US894/oz), after taking into account the terms of its off-take agreement
with Western Platinum Limited, a subsidiary of Lonmin Plc.
Despite the lower USD gold price, the average ZAR gold price received by the group increased by 11.7% to
ZAR485,215/kg (2014: ZAR434,403/kg), as a result of the weakening of the ZAR/USD exchange rate.
The average ZAR PGE net basket price received by the group decreased by 11.2% to ZAR8,716/oz
(2014: ZAR9,815/oz), mainly as result of the lower USD PGE basket prices received, set-off to some
extent by the weakening of the ZAR/USD exchange rate during the period.
Statement of profit or loss and other comprehensive income
For the six months ended For the six months ended
31 December 2015 31 December 2014 Movement
ZAR GBP ZAR GBP ZAR GBP
(millions) (millions) (millions) (millions)
Revenue 1,575.4 75.6 1,217.4 68.1 29.4% 11.0%
Cost of production (1,053.7) (50.6) (974.3) (54.5) 8.1% (7.2%)
Mining profit 406.2 19.5 154.2 8.6 163.4% 126.7%
EBITDA 418.7 20.1 230.6 12.9 81.6% 55.8%
Profit after taxation 227.6 10.9 99.2 5.5 129.4% 98.2%
Headline earnings 227.6 10.9 102.6 5.7 121.8% 91.2%
EPS (cents/pence) 12.43 0.60 5.42 0.30 129.3% 100.0%
HEPS (cents/pence) 12.43 0.60 5.61 0.31 121.6% 93.5%
Weighted average number
of shares in issue
(millions) 1,831.5 1,831.5 1,830.0 1,830.0 0.1% 0.1%
Analysing the group’s financial performance
Revenue, costs, profitability and dividends
Performance Interim period commentary
Revenue The group’s revenue, period-on-period, increased by 29.4% to ZAR1,575.4 million
(2014: ZAR1,217.4 million). The increase was predominantly due to the following:
1) Gold sold increased by 17.4% to 101,797oz (2014:86,675oz).
2) The average ZAR gold price received by the group increased by 11.7% to
ZAR485,215/kg (2014: ZAR434,403/kg), as a result of the weakening of the
ZAR/USD exchange rate.
Average gold price As previously noted the average ZAR gold price increased by 11.7% to ZAR485,215/kg
and PGE price (2014: ZAR434,403/kg), as a result of the weakening of the ZAR/USD exchange rate.
The increase in the average ZAR gold price was a result of the following movements:
1) The group realised an average gold price of USD1,110/oz, a decrease of 9.8%
from the USD1,231/oz achieved in the prior reporting period.
2) The average ZAR/USD exchange rate was 23.9% weaker at ZAR13.60:1 (2014: ZAR10.98:1).
Cost of production Pan African Resources’ period-on-period total gold and PGE cost of production per the
statement of comprehensive income increased by 8.1% to ZAR1,053.7 million
(2014: ZAR974.3 million). The new ETRP resulted in an additional ZAR30.2 million in
production costs. During the period under review the group also had gold inventory
credit adjustments which reduced the cost of production by ZAR25.5 million
(2014: gold inventory debit adjustments increasing cost of production by
ZAR14.4 million). Excluding the ETRP and gold inventory adjustments, the effective
cost increased by 9.3% to ZAR1,049.0 million (2014:ZAR959.9 million) predominately
effected by the following:
- The group’s salaries and wages increased by 9.4% to ZAR497.6 million
(2014: ZAR455.0 million). This increase was due to:
o The average Barberton Mines salary and wage agreement for the two financial
years ending 30 June 2016 and 2017 amounts to approximately 9% per annum,
effective from 1 July 2015.
o The average Evander Mines salary and wage agreement for the three financial
years ending 30 June 2016, 2017 and 2018 amounts to approximately 7.8% per
annum, effective from 1 July 2015.
o The employees received higher production incentives in comparison to the prior
reporting period as result of the increase in tonnages milled and gold sold
from underground mining operations.
- The group’s electricity costs increased by 16.0% to ZAR170.6 million
(2014: ZAR147.1 million). The NERSA approved increases applied to electricity
consumption was 12.7% for the period under review. The further increase was a
result of the additional electricity costs associated with the ETRP amounting to
ZAR6.0 million (2014: nil).
Cash costs The group’s cost of production per kilogramme decreased by 7.9% to ZAR323,730/kg
(2014: ZAR351,461/kg). The 7.9% decrease was predominantly due to:
- Gold sold increased by 17.4% to 101,797oz (2014:86,675oz).
- Total gold cost of production (including realisation costs) increased by 8.2%
to ZAR1,025.0 million (2014: ZAR947.5 million).
All-in sustaining The group’s all-in sustaining cost of production per kilogramme (including
cash costs direct cost of production, royalties, associated corporate costs and overheads and
sustaining capital expenditure) decreased by 3.5% to ZAR396,819/kg
(2014: ZAR411,384/kg).
In addition to the matters detailed previously, the group’s all-in sustaining
cash costs were also impacted by an unrealised cost collar derivative mark to
market fair value adjustment of ZAR40.6 million in the reporting period, which
was allocated to the operational all-in sustaining costs.
All-in costs The all-in cost per kilogramme (sustaining cost of production and once-off expansion
capital) decreased by 12.2% to ZAR397,692/kg (2014: ZAR453,068/kg).
In addition to the matters detailed previously, the group’s all-in costs were also
impacted by ZAR88.3 million once-off ETRP expansionary capital in the prior
reporting period.
Gold collar Barberton Mines entered into a short-medium term strategic hedge in July 2015,
derivatives when the spot gold price was at ZAR440,000/kg, to protect its operational revenue,
cash flows and group dividends payments against severe adverse price movements in
the ZAR gold price. During the current financial period, the group recorded an
unrealised cost collar derivative mark to market fair value adjustment of
ZAR40.6 million (2014: realised cost collar derivative income of ZAR44.8 million),
which was recorded under the other income and expense line in the statement of
comprehensive income. The transaction expenditure/income was also
factored into the current and prior year’s operational all-in sustaining costs
and all-in costs.
The salient terms and conditions of the current calendar spread zero cost collar is
summarised as follows:
1) 1 October 2015 – 30 September 2016 at a strike price of ZAR450,000/kg of gold,
representing approximately 25% of the anticipated production volumes.
2) The call option volume of 25,000oz of gold is effective from 1 October 2016 –
30 September 2017 at a strike price of ZAR505,000/kg gold representing
approximately 12.5% of the anticipated production volumes.
3) The cost collar is measured on an Asian basis and amortises on a monthly
basis over its term.
4) The mark to market fair value adjustment of the zero cost collar of
ZAR40.6 million at 31 December 2015, was based on a gold price of approximately
ZAR530,000/kg.
The group currently only has this one gold collar derivative in place.
Profit after Profit after taxation increased by 129.4% to ZAR227.6 million (2013: ZAR99.2 million)
tax and headline and the corresponding headline earnings increased by 121.8% to ZAR227.6 million
earnings (2014: ZAR102.6 million), primarily impacted by the following:
1) Revenue increased by ZAR358 million supported by higher gold production and
the effective ZAR gold price received.
2) Cost of production increased by ZAR79.4 million.
3) Depreciation increased by ZAR26.3 million following increased charges
associated with the commissioning of the ETRP and Evander Mine’s 8 Shaft 25 level.
4) Other income and expenditure increased to ZAR72.6 million due to the unrealised
cost collar derivative mark to market fair value adjustment of ZAR40.6 million
(2014: realised cost collar derivative income of ZAR44.8 million).
5) Royalty costs increased by ZAR10.7 million to ZAR24.9 million
(2014: ZAR14.2 million) resulting from increased gold revenues.
6) Taxation increased by ZAR31.2 million as result of the improved
operational performance.
EPS and HEPS The group’s EPS in ZAR was 12.43 cents (2014: 5.42 cents), an increase of 129.3%.
The group’s HEPS in ZAR terms increased by 121.6% to 12.43 cents (2014: 5.61 cents).
The difference between the EPS and HEPS, was as a result of adjusting the attributable
earnings for the loss on disposal of fixed assets and the associated impairment
upon the sale of Auroch Minerals NL in the prior reporting period. Refer to the
statement of comprehensive income for the reconciliation between EPS and HEPS.
The EPS and HEPS is calculated by applying the groups’ weighted average number
of shares to the attributable and headline earnings, which increased by 0.1% to
1,831.5 million shares (2014:1,830.0 million shares).
Taxation The group’s total taxation charge increased by 75.5% to ZAR72.5 million
(2014: ZAR41.3 million) due to higher gold revenues and improved profit margins.
Dividend The group paid a final dividend for the 2015 financial year of ZAR210.0 million or
GBP9.7 million (2014: ZAR258.0 million or GBP14.9 million) on 24 December 2015,
equating to ZAR0.1147 or 0.53p per share (2014: ZAR0.1410 or 0.82p per share).
Statement of financial position
For the six months ended For the six months ended
31 December 2015 31 December 2014 Movement
ZAR GBP ZAR GBP ZAR GBP
(millions) (millions) (millions) (millions)
Non-current assets 4,169.9 189.2 4,147.1 220.2 0.5% (14.1%)
Current assets 271.4 11.8 332.3 17.2 (18.3%) (31.4%)
Total equity 2,754.2 127.6 2,738.5 147.2 0.6% (13.3%)
Non-current liabilities 1,251.4 54.4 1,309.5 67.9 (4.4%) (19.9%)
Current liabilities 435.7 19.0 431.4 22.4 1.0% (15.2%)
The increase in non-current assets was mainly attributable to capital expenditure during the period,
amounting to ZAR128.9 million (2014: ZAR214.6 million) less depreciation of ZAR109.9 million
(2014: ZAR83.6 million). The capital expenditure is detailed by operation below:
For the six months ended For the six months ended
31 December 2015 31 December 2014 Movement
ZAR GBP ZAR GBP ZAR GBP
(millions) (millions) (millions) (millions)
Barberton Mines 48.2 2.3 54.8 3.0 (12.0%) (23.3%)
BTRP 7.7 0.4 1.1 0.1 600.0% 300.0%
Evander Mines 71.9 3.5 69.3 3.9 3.8% (10.3%)
ETRP - - 88.3 4.9 (100.0%) (100.0%)
Phoenix Platinum 0.8 - 0.1 - 700.0% 0.0%
Corporate 0.3 - 1.0 0.1 (70.0%) (100.0%)
Total capital expenditure 128.9 6.2 214.6 12.0 (39.9%) (48.3%)
Included in non-current assets is the rehabilitation trust fund balance of ZAR321.9 million (30 June
2015: ZAR312.3 million), which increased by ZAR9.5 million as a result of growth in the underlying
investment portfolio. The rehabilitation trust fund’s investment portfolio comprises investments in
guaranteed equity linked notes, government bonds and equities.
Current assets decreased as a result of inter-alia:
- A decrease in cash on hand from ZAR64.2 million at 30 June 2015 to an overdraft held within the
group’s centralised general banking facilities of ZAR10.2 million. The group’s treasury function
ensures that all available cash resources are pooled and actively managed to ensure that the
group’s indebtedness is kept to a minimum.
- Accounts receivable decreased to ZAR162.9 million (30 June 2015: ZAR184.5 million), as a result
of lower outstanding gold receivables owing at the end of the reporting period.
- Inventory increased to ZAR93.4 million (30 June 2015: ZAR67.6 million) due to an increase in
gold concentrates and gold plant inventory at period end.
The group remains liquid with a net debt position of ZAR345.8 million (30 June 2015: ZAR321.1 million),
comprising the revolving credit facility balance of ZAR225.2 million (30 June 2015: ZAR245.7 million),
the Evander Mines’ gold loan of ZAR110.4 million (30 June 2015: ZAR139.6 million) and a general banking
facility of ZAR10.2 million (30 June 2015: Cash on hand of ZAR64.2 million). The group is profitable and
cash flow generative, which has resulted in the group’s net debt being reduced from ZAR458.6 million at
31 December 2014 to ZAR345.8 million at 31 December 2015.
The decrease in non-current liabilities is largely attributable to the decrease in the Evander Mines’
gold loan of ZAR53.9 million (30 June 2015: ZAR78.3 million) and the non-current portion of the revolving
credit facility reducing to ZAR204.3 million (30 June 2015: ZAR221.6 million).
Summary of long term debt facilities:
Revolving credit Evander Mindes
facility gold loan Total
31 December 30 June 31 December 30 June 31 December 30 June
2015 2014 2015 2014 2015 2014
ZAR GBP ZAR GBP ZAR GBP
(millions) (millions) (millions) (millions) (millions) (million)
Non-current Portion 204.3 221.6 53.9 78.3 258.2 299.9
Current portion 20.9 24.1 56.5 61.3 77.4 85.4
Total 225.2 245.7 110.4 139.6 335.6 385.3
Current liabilities remained relatively constant, with an increase in taxation payable to the South
African Revenue Service at ZAR28.6 million(30 June 2015: ZAR9.7 million) and an increase in the
general banking facility balance to ZAR10.2 million (30 June 2015: nil), set-off by a decrease in
accounts payable to ZAR299.2 million (30 June 2015: ZAR324.2 million).
The group’s equity increased largely due to the group generating earnings of ZAR227.6 million
(2014: ZAR99.2 million) less a dividend of ZAR210 million (2014:ZAR258 million) paid during the
reporting period.
Operational performance
Review of group gold operations production summary
Underground and Tailings Total continuing
surface operation operations operations
Period Barber-
ended Barber- ton Evander
31 ton Evander Mines Mines Group
December Units Mines Mines Total BTRP ETRP total total total
Tonnes milled 2015 (t) 133,890 200,942 - - 133,890 200,942 334,832
- underground 2014 (t) 124,185 197,879 322,064 - - 124,185 197,879 322,064
Tonnes milled
– surface 2015 (t) 5,540 - 5,540 - - 5,540 - 5,540
(note 5) 2014 (t) 2,528 198,578 201,106 - - 2,528 198,578 201,106
Tonnes milled
- total
underground
and surface 2015 (t) 139,430 200,942 340,372 - - 139,430 200,942 340,372
2014 (t) 126,713 396,457 523,170 - - 126,713 396,457 523,170
Tonnes
processed 2015 (t) - - - 464,179 729,085 464,179 729,085 1,193,264
tailings 2014 (t) - - - 484,315 - 484,315 - 484,315
Tonnes
processed -
surface
feedstock 2015 (t) - - - - 161,090 - 161,090 161,090
(note 5) 2014 (t) - - - - - - - -
Tonnes
processed -
total tailings
and surface 2015 (t) - - - 464,179 890,175 464,179 890,175 1,354,354
feedstock 2014 (t) - - - 484,315 - 484,315 - 484,315
Tonnes milled
and processed 2015 (t) 139,430 200,942 340,372 464,179 890,175 603,609 1,091,117 1,694,726
- total 2014 (t) 126,713 396,457 523,170 484,315 - 611,028 396,457 1,007,485
Headgrade - 2015 (g/t) 10.9 5.8 7.9 - - 10.9 5.8 7.9
underground 2014 (g/t) 11.6 4.3 7.1 - - 11.6 4.3 7.1
Headgrade - 2015 (g/t) 1.1 - 1.1 - - 1.1 - 1.1
surface 2014 (g/t) 1.4 1.4 1.4 - - 1.4 1.4 1.4
Headgrade
- total
underground 2015 (g/t) 10.6 5.8 7.8 - - 10.6 5.8 7.8
and surface 2014 (g/t) 11.4 2.9 4.9 - - 11.4 2.9 4.9
Headgrade - 2015 (g/t) - - - 1.3 0.3 1.3 0.3 0.7
tailings 2014 (g/t) - - - 1.5 - 1.5 - 1.5
Headgrade -
surface 2015 (g/t) - - - - 1.3 - 1.3 1.3
feedstock 2014 (g/t) - - - - - - - -
Headgrade -
total tailings
and surface 2015 (g/t) - - - 1.3 0.5 1.3 0.5 0.8
feedstock 2014 (g/t) - - - 1.5 - 1.5 - 1.5
Headgrade - 2015 (g/t) 10.6 5.8 7.8 1.3 0.5 3.5 1.5 2.2
total 2014 (g/t) 11.4 2.9 4.9 1.5 - 3.6 2.9 3.3
Recovered 2015 (g/t) 9.7 5.6 7.3 0.9 0.3 2.9 1.3 1.9
grade 2014 (g/t) 10.1 2.6 4.5 0.8 - 2.7 2.6 2.7
Overall recovery
- underground 2015 (%) 92% 97% 94% - - 92% 97% 94%
operations 2014 (%) 89% 93% 91% - - 89% 93% 91%
Overall recovery
- tailings 2015 (%) - - - 64% 63% 64% 63% 63%
operations 2014 (%) - - - 51% - 51% - 51%
Gold production
- underground 2015 (oz) 43,487 36,370 79,857 - - 43,487 36,370 79,857
operations 2014 (oz) 42,666 26,024 68,690 - - 42,666 26,024 68,690
Gold production
- surface
operations 2015 (oz) 130 - 130 - - 130 - 130
(note 5) 2014 (oz) 76 7,831 7,907 - - 76 7,831 7,907
Gold production
- tailings 2015 (oz) - - - 12,830 3,708 12,830 3,708 16,538
operations 2014 (oz) - - - 11,710 - 11,710 - 11,710
Gold production
- surface
feedstock
(note 5) 2015 (oz) - - - - 5,272 - 5,272 5,272
2014 (oz) - - - - - - - -
Gold sold 2015 (oz) 43,617 36,370 79,987 12,830 8,980 56,447 45,350 101,797
2014 (oz) 41,232 33,733 74,965 11,710 - 52,942 33,733 86,675
Average ZAR
gold price 2015 (ZAR/
received KG) 486,567 483,309 485,075 486,566 484,298 486,589 483,504 485,215
2014 (ZAR/
KG) 433,778 435,376 434,497 433,799 - 433,783 435,376 434,403
Average USD
gold price 2015 USD/
received oz) 1,113 1,105 1,109 1,113 1,108 1,113 1,106 1,110
2014 (USD/
oz) 1,229 1,233 1,231 1,229 - 1,229 1,233 1,231
ZAR cash cost 2015 (ZAR/
KG) 297,877 435,190 360,313 160,665 230,857 266,690 394,730 323,730
2014 (ZAR/
KG) 312,502 464,955 381,040 162,203 - 279,150 464,955 351,461
ZAR all-in
sustaining 2015 (ZAR/
costs KG) 402,747 511,427 452,164 167,241 231,859 349,218 456,070 396,819
2014 (ZAR/
KG) 376,211 538,584 449,200 169,396 - 330,340 538,584 411,384
ZAR all-in 2015 (ZAR/
cost KG) 403,422 513,061 453,275 167,241 231,859 349,739 457,380 397,692
2014 (ZAR/
KG) 385,812 549,796 459,523 169,396 - 337,814 633,960 453,068
USD cash cost 2015 (USD/
oz) 681 995 824 367 528 610 903 740
2014 (USD/
oz) 885 1,317 1,079 459 - 791 1,317 996
USD all-in 2015 (USD/
sustaining cost oz) 921 1,170 1,034 382 530 799 1,043 908
2014 (USD/
oz) 1,066 1,526 1,272 480 - 936 1,526 1,165
USD all-in 2015 (USD/
cost oz) 923 1,173 1,037 382 530 800 1,046 910
2014 (USD/
oz) 1,093 1,557 1,302 480 - 957 1,796 1,283
ZAR cash
cost per 2015 (ZAR/
tonne t) 2,898 2,450 2,632 138 72 776 510 605
2014 (ZAR/
t) 3,161 1,230 1,698 122 - 752 1,230 940
Capital
expenditure 2015 (ZAR
million)48.2 71.9 120.1 7.7 - 55.9 71.9 127.8
2014 (ZAR
million)54.8 69.3 124.1 1.1 88.3 55.9 157.6 213.5
Average 2015 (ZAR/
exchange rate USD) 13.60 13.60 13.60 13.60 13.60 13.60 13.60 13.60
2014 (ZAR/
USD) 10.98 10.98 10.98 10.98 10.98 10.98 10.98 10.98
Revenue 2015 (ZAR
million)660.1 546.7 1,206.8 194.2 135.3 854.3 682.0 1,536.3
2014 (ZAR
million)556.3 456.8 1,013.1 158.0 - 714.3 456.8 1,171.1
Cost of
production 2015 (ZAR
(note 4) million)404.1 492.3 896.4 64.1 64.5 468.2 556.8 1,025.0
2014 (ZAR
million)400.6 487.8 888.4 59.1 - 459.7 487.8 947.5
All-in
sustainable
cost of 2015 (ZAR
production million)546.4 578.5 1,124.9 66.7 64.8 613.1 643.3 1,256.4
2014 (ZAR
million)482.3 565.1 1,047.4 61.7 - 544.0 565.1 1,109.1
All-in cost 2015 (ZAR
of production million)547.3 580.4 1,127.7 66.7 64.8 614.0 645.2 1,259.2
2014 (ZAR
million)494.6 576.8 1,071.4 61.7 - 556.3 576.8 1,133.1
Adjusted 2015 (ZAR
EBITDA million)180.0 59.6 239.6 130.1 64.6 310.1 124.2 434.3
2014 (ZAR
million)155.3 6.2 161.5 80.2 - 235.5 6.2 241.7
Note 1: Surface source production allocated to ETRP from 1 March 2015.
Note 2: Split between ETRP and surface feedstock cost per tonne is ZAR42/t and ZAR213/t, averaging at
ZAR72/t, and cost per kilogramme of ZAR262,120/kg and ZAR208,863/kg, averaging at ZAR230,857/kg.
Note 3: Adjusted EBITDA is represented by earnings before interest, taxation, depreciation and
amortisation, impairments and loss on disposal of associate. Note 4: The gold cost of production,
comprises of gold cost of production and realisation costs as reported in the statement of
comprehensive income.
Note 5: Since commissioning the ETRP, the Evander Mines surface tonnes are being treated through the
ETRP circuit, therefore it is recorded in the ETRP surface feedstock line item in the current reporting
period. The ETRP surface feedstock material includes Evander Mines surface sources and higher grade
toll-treatment material.
Review of Barberton Mines
Safety
Barberton Mines’ total recordable injury frequency rate (‘TRIFR’) increased to 14.81 (2014: 12.93)
per 1,000,000 man hours worked, and the lost time injury frequency rate (‘LTIFR’) increased to 2.47
(2014: 1.50) per 1,000,000 man hours worked. The reportable injury frequency rate (‘RIFR’) increased
to 0.62 (2014: Nil) per 1,000,000 man-hours worked. The group is actively pursuing measures to reduce
injury frequency rates. No fatalities were reported in the current period (2014: no fatalities).
Operating performance
Barberton Mines’ (including BTRP) gold sold increased by 6.6% to 56,447oz (2014: 52,942oz). The
increased production resulted in the total combined ZAR cash cost per kilogramme, decreasing by 4.5%
to ZAR266,690/kg (2014: ZAR279,150/kg). The Barberton Mines’ combined USD cash costs per ounce
reduced by 22.9% to USD610/oz (2014: USD791/oz).
Barberton Mines’ (excluding BTRP) gold sold increased by 5.8% to 43,617oz (2014: 41,232oz). Tonnes
milled from mining operations was 10.0% higher at 139,430t (2014: 126,713t), due to the underground
mining operations tonnes increasing to 133,890t (2014: 124,185t) and surface tonnes milled
increasing to 5,540t (2014: 2,528t). The underground head grade reduced to 10.9g/t (2014: 11.6g/t).
The increase in gold sold from underground and surface mining operations was largely attributable
to the increase in tonnes milled.
Gold sold from the BTRP increased by 9.6% to 12,830oz (2014: 11,710oz). Tonnes processed decreased
by 4.2% to 464,179t (2014: 484,315t) at a lower head grade of 1.3g/t (2014: 1.5g/t) which was
set-off by an increase in plant recoveries to 64% (2014: 51%).
Barberton Mines’ (excluding BTRP) ZAR cash costs per kilogramme decreased by 4.7% to ZAR297,877kg
(2014: ZAR312,502/kg) and the USD cash costs per ounce decreased by 23.1% to USD681/oz (2014: USD885/oz).
This was mainly due to an increase in gold sold by 5.8% to 43,617oz (2014: 41,232oz) and a reduction in cost
of production following a gold inventory credit adjustment amounting to ZAR23.5 million
(2014: ZAR14.4 million debit adjustment) as a result of 58 kilogrammes of unsold gold inventory concentrates
held in the Fairview BIOX plant. Excluding these gold inventory adjustments Barberton Mines’
(excluding BTRP) ZAR cash costs per kilogramme increased by 4.6% to ZAR315,213/kg (2014: ZAR301,238/kg).
The BTRP’s ZAR cash costs decreased by 0.9% to ZAR160,665/kg (2014: ZAR162,203/kg) and USD cash costs
per ounce decreased to USD367/oz (2014: USD459/oz). Total cost of production increased by 8.5% to
ZAR64.1 million (2014: ZAR59.1 million), while the BTRP gold sold increased by 9.6% to 12,830oz
(2014: 11,710oz).
The total cost of production (including realisation costs and gold inventory adjustments) increased
by 1.8% to ZAR468.2 million (2014: ZAR459.7 million). Excluding gold inventory adjustments, the total
cost of production increased by 10.4% to ZAR491.7 million (2014: ZAR445.3 million). The main
period-on-period cost contributors were the following:
- Salaries and wages (excluding the BTRP) increased by 15.7% to ZAR219.3 million (2014: ZAR189.5 million).
The salary and wages increase was as a result of the wage agreement settlement, which averages 9% over
the two year period. This increase was coupled with increased production, which resulted in a rise in
production incentives and overtime payments; as a result, the effective increase was 15.7% higher
than the comparable period.
- Mining costs increased by 1.0% to ZAR58.5 million (2014: ZAR57.9 million). The vamping contractor’s
costs increased by 2.7%. The mining costs excluding the vamping contractors’ costs remained flat
period-on-period, indicating excellent cost control exercised by the mining team, while also increasing
tonnes mined.
- Processing costs (excluding the BTRP) decreased by 10.2% to ZAR29.1 million (2014: ZAR32.4 million),
as a result of lower metallurgical plant repairs and maintenance costs in comparison to the prior
reporting period.
- Engineering and technical services costs increased by 24.2% to ZAR39.0 million (2014: ZAR31.4 million).
Barberton Mines incurred an additional cost of ZAR5.5 million for secondary support at Fairview mine
to assist in accessing additional high grade pillars, as well as an additional ZAR2.2 million that was
spent on corrosion maintenance in BTRP’s carbon-in-leach tanks.
- The cost of electricity increased by 9.2% to ZAR52.1 million (2014: ZAR47.7 million). Electricity
costs excluding the BTRP increased by 8.9% to ZAR45.3 million (2014: ZAR41.6 million). The increase
was lower than the National Energy Regulator South Africa (‘NERSA’) approved rate increases, due to
improved electricity management of metallurgical plants and ensuring processing occurred predominantly
during lower peak tariff periods.
- Security costs were well controlled and only increased by 3.7% to ZAR14.1 million (2014: ZAR13.6 million).
The security complement remains adequate to curtail criminal mining activities and ensure protection of
assets.
- Administration and other costs increased by 18.6% to ZAR19.8 million (2014: ZAR16.7 million). In addition
to the standard inflationary increases, the occupational accident and disease insurance, which is based
on the average cost to company of employees, increased by ZAR0.7 million. The asset and bullion insurance
costs increased by ZAR0.3 million due to a rise in insured asset values. Additional legal expenses
amounted to ZAR0.3 million during the period under review. License and software charges increased by
ZAR0.3 million following IT upgrades.
- Gold inventory movement credits amounted to ZAR23.5 million (2014: ZAR14.4 million debit adjustment).
- Off-mine realisation costs decreased by 19.4% to ZAR2.5 million (2014: ZAR3.1 million).
- The BTRP operating costs increased by 8.5% to ZAR64.1 million (2014: ZAR59.1 million).
Barberton Mines’ ZAR combined all-in cash cost per kilogramme increased by 3.5% to ZAR349,739/kg (2014:
ZAR337,814/kg). The total combined USD all-in cash cost per ounce decreased by 16.4% to USD800/oz
(2014: USD957/oz). This increase in all-in cash costs was mainly as a result of the following:
- Gold sold increased by 6.6% to 56,447oz (2014: 52,942oz) therefore reducing the all-costs per kilogramme.
- Cost of production increased by 1.8% to ZAR468.2 million (2014: ZAR459.7 million).
- Barberton Mines recorded an unrealised mark to market fair value adjustment of ZAR40.6 million (2014: nil)
on its cost collar derivative structure, increasing the all-in sustaining costs and all-in costs.
- Unchanged capital expenditure of ZAR55.9 million.
Capital expenditure
Total capital expenditure at Barberton Mines was ZAR55.9 million (2014: ZAR55.9 million). Maintenance
capital expenditure of ZAR30.0 million (2014: ZAR20.1 million) and development capital expenditure
of ZAR25.0 million (2014: ZAR25.5 million) was incurred.
Expansion capital of ZAR0.9 million (2014: ZAR10.3 million) was spent on the development of the
Fairview ventilation raise borehole project to improve operating ambient temperatures.
Looking ahead
Barberton aims to maintain and increase levels of production by focussing on improving its tonnages
throughput, while delivering on underground head grade in excess of 10g/t. Cost containment to avoid
margin erosion is a constant focus of the management team and will continue to be a priority. The
management team remains committed to improving their safety performance.
Review of Evander Mines
Safety
Evander Mines’ TRIFR increased to 14.61 (2014: 7.55) per 1,000,000 man hours worked. In the current period,
Evander Mines implemented new systems and controls to ensure the reporting of all incidents and accidents.
The LTIFR increased to 5.44 (2014: 2.86) and RIFR increased to 3.44 (2014: 1.82) per 1,000,000 man hours
worked respectively. The group is actively pursuing measures to reduce injury frequency rates. No fatalities
were reported in the current period (2014: no fatalities).
Operating performance
For the period under review Evander Mines’ (including ETRP) gold sold increased by 34.4% to 45,350oz
(2014: 33,733oz). Gold sold increased due to the underground mining operations increasing production to
36,370oz (2014: 26,024oz), while the ETRP provided an additional 3,708oz (2014: Nil) from tailings
sources. Surface sources and surface feedstock material produced 5,272oz (2014: 7,831oz), following a
reduction in the available surface tonnages to process.
Tonnes milled from underground sources, increased by 1.5% to 200,942t (2014: 197,879t). Tonnage treated
by the ETRP amounted to 890,175t, which comprised of 729,085t (2014: Nil) from tailings sources and
161,090t of surface feedstock (2014: 198,578t of surface sources which is now reported under the ETRP).
The total cost of production (including realisation costs and gold inventory adjustments) increased
by 14.1% to ZAR556.8 million (2014: ZAR487.8 million). The cost of production includes additional costs
in relation to the new ETRP plant. The cost of production, excluding the additional ETRP costs, increased
by 8.0% to ZAR526.6 million (2014: ZAR487.8 million).
The combined ZAR cash costs per kilogramme decreased by 15.1% to ZAR394,730/kg (2014: ZAR464,955/kg),
following from the improved production which led to gold sales increasing by 34.4% to 45,350oz
(2014: 33,733oz). USD cash costs per ounce decreased by 31.4% to USD903/oz (2014: USD1,317/oz),
supported by the depreciating ZAR/USD exchange rate and improved gold production.
The main period-on-period cost contributors were the following:
- Salaries and wages (excluding the ETRP) increased by 4.3% to ZAR247.8 million (2014: ZAR237.5 million).
The salaries and wages costs increased as a result of the Chamber of Mines’ wage agreement averages 7.8%
over a three year period. The increase was lower than the average chamber increase, due to the
implementation of a voluntary separation programme to optimise employee numbers. The average number of
employees (excluding capital employees) retained during the previous financial period decreased by 2.8%
to 2,247 (2014: 2,312).
- Mining costs increased by 8.3% to ZAR49.5 million (2014: ZAR45.7 million) due to additional costs incurred
on the No. 2 and 3 declines vamping recovery projects totalling ZAR4.5 million. This produced an additional
25.5 kilogramme (820oz) of gold during the current period.
- Processing costs (excluding ETRP) increased by 11.7% to ZAR57.4 million (2014: ZAR51.4 million), mainly
as result of acquiring surface feedstock material for ZAR4.4 million.
- Engineering and technical services costs increased by 24.7% to ZAR28.3 million (2014: ZAR22.7 million),
due to increased conveyor belt maintenance costs of ZAR2.4 million to maintain current efficiencies, as
well as increased electrical repairs and maintenance costs of ZAR1.6 million to support the mines’ mature
infrastructure.
- Electricity and water costs increased by 19.1% to ZAR116.0 million (2014: ZAR97.4 million).
The electricity costs that related to the ETRP amounted to ZAR6.0 million for the six months ended
31 December 2015. The increase in electricity and water excluding the ETRP increased by 12.9% to
ZAR110.0 million (2014: ZAR97.4 million) which is in line with Eskom’s tariff increase of 12.7% applicable
for the period under review.
- Security costs increased by 37.5% to ZAR7.7 million (2014: ZAR5.6 million) to curtail criminal mining
activities and protect surface assets.
- Administration and other costs decreased by 2.7% to ZAR25.6 million (2014: ZAR26.3 million).
- Gold inventory credit movements amounted to ZAR2.0 million (2014: nil).
- Off-mine realisation costs increased to ZAR2.3 million (2014: ZAR1.2 million) as a result of additional
gold concentrates provided by the ETRP to RandRefinery.
- ETRP’s cost of production associated with tailings sources amounted to ZAR30.2 million (2014: nil).
Evander Mines’ ZAR combined all-in cash cost per kilogramme decreased by 27.9% to ZAR457,380/kg (2014:
ZAR633,960/kg). The total combined USD all-in cash cost per ounce decreased by 41.8% to USD1,046/oz (2014:
USD1,796/oz). This increase in all-in cash costs was mainly as a result of the following:
- Increase in gold produced of 34.4% to 45,350oz (2014: 33,733oz).
- Once-off expansion capital related to the ETRP plant construction of ZAR88.3 million in the previous
comparative period as well as once-off voluntary separation costs of ZAR11.8 million in the previous
corresponding period.
Capital expenditure
Total capital expenditure at Evander Mines was ZAR71.9 million (2014: ZAR157.6 million). Maintenance
capital expenditure was ZAR30.6 million (2014: ZAR25.0 million) and development capital expenditure
was ZAR39.4 million (2014: ZAR44.3 million). Expansion capital was ZAR1.9 million (2014: ZAR88.3 million),
spent on the development of 26 level in the current period and the ETRP construction in the prior year.
Evander Mines employee share ownership programme
On 1 July 2015, Evander Mines implemented an employee share ownership programme which is similar
to the scheme implemented at Barberton Mines in June 2015. A newly established employee trust acquired
5% of the issued share capital of Evander Mines.
Looking ahead
Evander Mines will invest in development capital expenditure to ensure that improved flexibility
is achieved to mitigate the low grade mining cycles experiencedin the prior year. The operational
team will further focus on improving tonnages processed by the ETRP to reach its name plate capacity
of 200,000t per month from tailings and surface feedstock material.
Evander Mines continues to investigate the Elikhulu tailings retreatment project, which is anticipated
to treat slimes of approximately 12 million tonnes per annum at a headgrade of 0.28g/t, with a specific
focus on reducing the overall project capital. The management team will also continue to source
toll-treatment material with a higher head grade than our ETRP tailings sources as long as it is
economically viable, relative to treating our own tailings. The team is also revisiting previous
projects such as Evander South and the Evander 2010 Pay Channel, with the objective of identifying
viable options for the monetisation of these projects, in light of the prevailing gold price.
Review of platinum tailings operations
Review of Phoenix Platinum
Period ended Units Tailings operations
31 December Phoenix Platinum
Tonnes processed – tailings 2015 (t) 117,461
2014 (t) 135,963
Headgrade – tailings 2015 (g/t) 3.25
2014 (g/t) 3.16
Overall recovery 2015 (%) 39
2014 (%) 34
PGE Sold 2015 (oz) 4,493
2014 (oz) 4,711
Average ZAR PGE price received 2015 (oz) 8,716
2014 (oz) 9,815
Average USD PGE price received 2015 (USD/oz) 641
2014 (USD/oz) 894
ZAR cash cost 2015 (ZAR/oz) 7,653
2014 (ZAR/oz) 6,817
ZAR all-in sustaining costs 2015 (ZAR/oz) 8,268
2014 (ZAR/oz) 6,979
ZAR all-in cost 2015 (ZAR/oz) 8,268
2014 (ZAR/oz) 6,979
USD cash cost 2015 (USD/oz) 563
2014 (USD/oz) 621
USD all-in sustaining cost 2015 (USD/oz) 608
2014 (USD/oz) 636
USD all-in cost 2015 (USD/oz) 608
2014 (USD/oz) 636
ZAR cash cost per tonne 2015 (ZAR/t) 293
2014 (ZAR/t) 236
Capital expenditure 2015 (ZAR million) 0.8
2014 (ZAR million) 0.1
Average exchange rate 2015 (ZAR/USD) 13.60
2014 (ZAR/USD) 10.98
Revenue 2015 (ZAR million) 39.2
2014 (ZAR million) 46.2
Cost of Production 2015 (ZAR million) 34.4
2014 (ZAR million) 32.1
All-in sustainable cost of production 2015 (ZAR million) 37.1
2014 (ZAR million) 32.9
All-in cost of production 2015 (ZAR million) 37.1
2014 (ZAR million) 32.9
Adjusted EBITDA 2015 (ZAR million) 2.9
2014 (ZAR million) 13.5
Safety
Phoenix Platinum maintained its excellent safety record, with no injuries recorded. Operating
performance Phoenix Platinum PGE’s ounces produced decreased by 4.6% to 4,493oz (2014: 4,711oz).
The main contributing factor for the lower PGE ounces produced was a reduction in tonnages processed
of 13.6% to 117,461t (2014: 135,963t). This was as a result of the drought constraining water
resources to support re-mining activities at the Buffelsfontein and Elandskraal tailings resource.
The resultant effect was a loss of three weeks of production. The decrease in the PGE ounces produced
was also affected by IFMSA shutting down its underground Lesedi operations, following the initiation
of business rescue proceedings.
Phoenix Platinum is situated adjacent to the IFMSA property and a portion of the feedstock (previously 20%)
for the Phoenix Platinum’s operation was obtained from tailings arising from IFMSA’s chrome processing
and mining activities. IFMSA is currently in business rescue proceedings and its processing and mining
activities have been suspended. Phoenix Platinum is not solely reliant on material from IFMSA and
has alternative tailing sources. However, Phoenix Platinum sources electricity, water and certain
other services from IFMSA and is in discussions with IFMSA regarding the continued provision of these services.
The CTRP achieved a 39% (2014: 34%) overall recovery on a blend of material from the Buffelsfontein and Elandskraal tailings resources.
The effective average ZAR PGE basket price received decreased by 11.2% to ZAR8,716/oz (2014: ZAR9,815/oz).
Cost per ounce of production increased by 12.3% to ZAR7,653/oz (2014: ZAR6,817/oz). In USD terms the PGE
basket price received decreased by 28.3% to USD641/oz (2014: USD894/oz). The USD cash costs per ounce
decreased by 9.3% to USD563/oz (2014: USD621/oz).
The total cost of production increased by 7.2% to ZAR34.4 million (2014: ZAR32.1 million). The main
period-on-period cost contributors were the following:
- Salary and wages increased by 5.3% to ZAR7.9 million (2014: ZAR7.5 million). A standard increase of
7.5% was granted to the employees, however production incentives decreased by 33.3% to ZAR0.2 million
(2014: ZAR0.3 million).
- Processing costs increased by 5.5% to ZAR23.2 million (2014: ZAR22.0 million).
- Electricity costs increased by 31.6% to ZAR2.5 million (2014: ZAR1.9 million). This increase was above
the NERSA tariff increase applicable for the period under review of 12.7%, due to adjusting the milling
coarseness of Elandskraal tailings, resulting in higher electricity consumption.
- Administration costs increased by 14.3% to ZAR0.8 million (2014:0.7 million).
The group is monitoring the outcome of the IFMSA business rescue proceedings closely. In the event that
the business rescue proceedings are finalised, and the Lesedi mine is put on care and maintenance
indefinitely and the current PGE market conditions persist, there is a risk of an impairment of
Phoenix Platinum’s carry value at financial year end.
Capital expenditure
Total capital expenditure at Phoenix Platinum increased to ZAR0.8 million (2014: ZAR0.1 million).
Looking ahead
Phoenix Platinum aims to optimise resources from Elandskraal and Kroondal to maintain production
and cash flows.
Group expansion/growth projects
Elikhulu Tailing Retreatment Plant (‘Elikhulu’)
In light of the positive results of the ETRP and the improved ZAR gold price, Pan African Resources
is completing a definitive feasibility-study to assess the merits of commencing construction of the
Elikhulu project. Elikhulu can potentially treat slimes at a processing capacity of up to 12 million
tonnes per annum and at a headgrade of 0.28g/t from the Winkelhaak, Leslie and Kinross tailings
storage facilities. The total mineral resource for Elikhulu is 165 million tonnes at 0.28g/t (1.5Moz)
with a life of mine of 14 years. The project is estimated to yield approximately 50,000oz of gold per
annum in the initial 8 years of production while treating the Kinross and Leslie tailings storage
facility and then approximately 38,000oz upon processing the Winkelhaak tailings storage facility.
Evander South
Significant work has been performed on evaluating the Evander South Project, and progressing it to a
preliminary economic assessment level. The project team is assessing the capital costs associated with
the various mine designs that would provide the most efficient and cost effective manner of accessing the
ore-body. The Evander South Project is a potentially attractive mining opportunity, whereby the Kimberley
reef could be exploited at shallow depths, commencing at 300 metres below surface. Evander South has an
estimated mineral resource of 4.9Moz (20.1Mt @ 7.7g/t).
Acquisition of Uitkomst Colliery (‘Colliery’)
In executing our strategy of creating shareholder value by identifying and acquiring attractive, cash
generative operating mining assets, the group entered into agreements to acquire the Colliery during
June 2015. The Colliery, located close to the town of Utrecht in KwaZulu Natal, South Africa, is a high
grade thermal export quality coal deposit with metallurgical applications. On the acquisition agreement
becoming effective, the Colliery will be acquired from OakleafInvestments Holding 109 Proprietary
Limited (‘Oakleaf’) and Shanduka Resources Proprietary Limited (‘Shanduka’) for a cash consideration of
approximately ZAR200 million. The Colliery is an existing operational mine and the acquisition is expected
to be earnings and cash flow accretive to Pan African Resources. It contains a coal resource of 25.7 million
tonnes, of which 22.1 million tonnes can be classed as measured or indicated, in accordance with the
SAMREC code. The area also has additional exploration potential. Current operations at the Colliery
demonstrate that it can readily produce yields of high grade coal suitablefor export or local, thermal
and metallurgical markets. The Colliery currently sells approximately 400,000 tonnes of coal per annum
to local and international customers.
The acquisition will be funded from an existing revolving credit facility and internally generated cash
flows. The group has also received credit committee approval by Nedbank Limited for a ZAR85 million
general banking facility for the Colliery’s working capital purposes. The acquisition still remains
subject to approval by the Department of Mineral Resources (‘DMR’) in terms of section 11 of the Mineral
and Petroleum Resources Development Act (‘MPRDA’). The group’s exposure to coal, through this acquisition,
also provides a natural hedge against an anticipated increase in rising energy prices in South Africa.
The Colliery acquisition is not a divergence from the group’s strategy and precious metals focus, but
rather an opportunity to add to the group’s cash flow and earnings base.
The Colliery salient features are:
Average run-of-mine coal mined per month : 50,000 tonnes
Average saleable coal produced per month : 34,000 tonnes
Approximate sustaining capital per year : ZAR7.5 million
Approximate profit and net cash flows : ZAR30–35 million
Current cash available : ZAR25 million
Coal price API4 USD per tonne : USD52
Exchange rate ZAR/USD : ZAR15.50
Coal API4 ZAR price per tonne : ZAR806
Life of mine : 28 years
Auroch Mineral NL (‘Auroch’)
In the prior year’s corresponding reporting period, on 17 November 2014, the group announced the
completion of the disposal of its interest in Auroch for a total amount of ZAR8.1 million (AUD0.85 million)
in full and final settlement of all amounts owing.
Even though the total settlement was less than the AUD2 million settlement previously agreed upon,
the transaction allowed for earlier payment and provided completion certainty for the group, enabling it
to maintain its focus on the core asset portfolio.
During the prior year’s corresponding reporting period, the group consolidated ZAR2.3 million of
Auroch’s exploration and corporate costs, which is disclosed in the statement of profit or loss and
other comprehensive income under ‘Loss in Associate’. In derecognising the 42% investment in Auroch,
the group further recognised an impairment of ZAR1.0 million and a loss on disposal of investment of
ZAR2.4 million in the statement of profit or loss and other comprehensive income.
Commitments reported in ZAR and GBP
The group had identified no contingent liabilities in the current or prior financial period.
The group had outstanding open orders contracted for the period end of ZAR48.3 million (2014:
ZAR32.4 million) or GBP2.1 million (2014: GBP1.8 million).
Authorised commitments for the new financial period not yet contracted for totalled
ZAR162.5 million (2014: ZAR133.2 million) or GBP7.1 million (2014: GBP7.4 million).
The group had guarantees in place of ZAR24.6 million (2014: ZAR24.6 million) or GBP1.1 million
(2014: GBP1.4 million) in favour of Eskom and ZAR14.0 million (2014: ZAR14.0 million) or
GBP0.6 million (2014: GBP0.8 million) in favour of the DMR.
Operating lease commitments, which fall due within the next year, amounted to ZAR2.3 million (2014:
ZAR2.9 million) or GBP0.1 million (2014: GBP0.2 million).
The group has committed ZAR200 million (GBP8.7 million) in the financial year to Oakleaf and
Shanduka, for the acquisition of the Colliery.
Fair value investments
Financial instruments that are measured at fair value grouped into levels 1 to 3 based on the extent to
which fair value is observable.
The levels are classified as follows:
Level 1 - fair value is based on quoted prices in active markets for identical financial assets or
liabilities;
Level 2 - fair value is determined using inputs other than quoted prices included within level 1 that
are observable for the asset or liability; and
Level 3 - fair value is determined on inputs not based on observable market data.
The group values its ZAR321.9 million (2014: ZAR292.1 million) or GBP14.0 million (2014: GBP16.2 million) rehabilitation trust funds which comprise of investments in guaranteed equity linked notes, government
bonds and equities according to level 1 quoted prices in an active market.
During the prior financial year, the company purchased 1,750,850 shares for ZAR18.9 million
(GBP1 million) in a listed available-for-sale investment. The investment is valued according to level 1
quoted prices in an active market.
During the financial period, the company entered into a cost collar derivative with a financial
institution. At period end the financial instrument was not closed out and settled, therefore resulting
in a financial exposure to be evaluated. The financial instrument was valued according to level 1 quoted
prices in an active market resulting in a unrealised mark to market fair value adjustment of
ZAR40.6 million (2014: realised gain of ZAR44.8 million).
Basis of preparation of the financial statements and accounting policies
The accounting policies applied in compiling the interim results are in terms of International
Financial Reporting Standards (‘IFRS’) adopted by the EuropeanUnion and South Africa, which are consistent
with those applied in preparing the group’s annual financial statements for the year ended 30 June 2015.
The financial information set out in this announcement does not constitute the company’s statutory accounts
for the half-year ended 31 December 2015.
The interim results have been prepared and presented in accordance with, and containing the
information required by IFRS on Interim Financial Reporting, International Accounting Standards
(‘IAS’) 34. The financial information included in the interim results has been prepared in accordance
with the recognition and measurement criteria of IFRS. This announcement does not itself contain
sufficient disclosure information to comply fully with IFRS.
The interim results have not been reviewed or reported on by the company’s external auditors.
JSE Limited listing
The company has a dual primary listing on the main board of the JSE Limited (‘JSE’) and the
Alternative Investment Market (‘AIM’) of the London Stock Exchange.
The preliminary announcement has been prepared in accordance with the framework concepts and the
measurement and recognition requirements of IFRS, the AC 500 standards as issued by the Accounting
Practices Board and the information as required by IAS 34: Interim Financial Reporting.
AIM listing
The financial information for the period ended 31 December 2015 does not constitute statutory accounts
as defined in sections 435 (1) and (2) of the CompaniesAct 2006.
The group’s announcement has been prepared in accordance with IFRS and International Financial
Reporting Interpretation Committee interpretations adopted for use by the European Union, with
those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
Directorship changes
No changes took place during the period under review while the following changes took place during the
prior year’s corresponding period:
- Mr R Smith was appointed as an independent non-executive director, with effect from 8 September 2014.
- Mr RG Still resigned as a non-executive director, with effect from 1 July 2014.
Shares issued
No shares were issued during the current or prior period under review. In the latter half of the prior
financial year, share options were exercised, resulting in an increase of 0.1% to 1,831.5 million
shares (2014:1,830.0 million shares).
Directors’ dealings
There were no director dealings in securities during the period under review.
Dividend
The group paid a final dividend of ZAR210.0 million or GBP9.7 million (2014: ZAR258.0 million or
GBP14.9 million) on 24 December 2015, relating to the 2015financial year, equating to ZAR0.1147 or
0.53p per share (2014: ZAR0.1410 or 0.82p per share).
Going concern
The board confirms that the business is a going concern and that it has reviewed the business’
working capital requirements in conjunction with its future funding capabilities for at least the next
12 months and has found them to be adequate. The group has a ZAR800 million revolving credit facility
from a consortium of South African banks (and a two year accordion option subject to the bank’s credit
committee approval for an additional ZAR300 million facility), and access to general banking facilities
of ZAR100 million. At 31 December 2015 the group had capacity on the revolving credit facility and
general banking facilities of ZAR575.0 million and ZAR58.0 million, respectively, to assist in funding
working capital requirements. Management is not aware of any material uncertainties which may cast
significant doubt on the group’s ability to continue as a going concern. Should the need arise the group
can cease most exploration and capital expenditure activities to conserve cash.
Events after the reporting period
As previously noted, the acquisition of the Colliery, remains subject to approval by the DMR in terms
of the MPRDA section 11 mining rights transfer to Pan African Resources.
Segment reporting
A segment is a distinguishable component of the group that is engaged in providing products or
services in a particular business sector or segment, which is subject to risk and rewards that
are different from those of other segments. The group’s business activities were conducted through
five business segments:
- Barberton Mines (including BTRP), located in Barberton South Africa;
- Evander Mines (including ETRP), located in Evander South Africa;
- Phoenix Platinum, located near Rustenburg South Africa;
- Corporate and growth projects; and
- Pan African Resources Funding Company Proprietary Limited (‘Funding company’).
The Executive committee reviews the operations in accordance with the disc
losures presented above.
Pan African Resources’ outlook
Pan African Resources’ pleasing operational and financial performance over the last period was
underpinned by improved gold production and the current ZAR gold price environment. The group is
well positioned to produce approximately 200,000oz and 9,000oz of gold and PGE respectively,
over the full year period.
The group remains committed to ensuring that a safe and productive environment is maintained and continuous
improvement in safety performances remain critical. The group was able to settle all wage demands at
operational level with agreements ranging between 2-3 years providing the group and stakeholders with a
level of certainty in this regard over the medium term.
The ETRP is a success with the project commissioned on time and within budget during February 2015 and
has provided organic growth of approximately 10,000oz of additional gold production per annum at
Evander Mines.
The ZAR gold price has recently increased to ZAR600,000/kg, and the group is positioned to capitalise
on the improved cash flow margins. These factors should enable the group to maintain an attractive
dividend going forward.
The Colliery transaction remains subject to ministerial approval, following which the team will prioritise
the integration of the mine into the group. The Colliery is profitable and cash generative and the
opportunistic acquisition provides a coal asset with a 28 year life of mine.
Pan African Resources’ strategy is to continue growing both organically and through acquisitions,
which are value accretive to our shareholders, whilst maximising margins from current operations.
With strong cash flows and improved funding capacity of up to ZAR1.1 billion, the group is well
positioned to take advantage of such growth opportunities.
Our appreciation is extended to the staff of Pan African Resources, for their daily commitment and
contributions that continue to drive our success.
Cobus Loots Deon Louw
Chief Executive Officer Financial Director
23 February 2016
Financial Statements: Condensed financial information
Consolidated GBP and ZAR Statement of Financial Position
as at 31 December 2015
31 December 30 June 31 December 31 December 30 June 31 December
2015 2015 2014 2015 2015 2014
(Unaudited) (Audited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP GBP GBP ZAR ZAR ZAR
(note 1) (note 1) (note 1)
ASSETS
Non-current assets
Property, plant and
equipment and
mineral rights 153,180,433 181,532,780 192,380,120 3,521,618,148 3,503,582,652 3,468,613,567
Other intangible
assets 197,598 202,488 211,682 4,542,773 3,908,021 3,816,624
Deferred taxation 118,419 327,748 274,873 2,722,464 6,325,533 4,955,969
Goodwill 21,000,714 21,000,714 21,000,714 303,491,812 303,491,812 303,491,812
Investments 678,909 904,818 674,268 15,608,118 17,462,996 12,157,054
Rehabilitation
trust fund 14,002,928 16,181,925 16,199,996 321,927,319 312,311,153 292,085,919
189,179,001 220,150,473 230,741,653 4,169,910,634 4,147,082,167 4,085,120,945
Current assets
Inventories 4,062,142 3,502,569 5,041,034 93,388,634 67,599,584 90,889,845
Current tax asset 657,849 827,298 573,472 15,123,957 15,966,858 10,339,700
Trade and other
receivables 7,085,421 9,559,010 12,738,850 162,893,843 184,488,890 229,681,450
Cash and cash
equivalents - 3,328,850 4,893,687 - 64,246,802 88,233,175
11,805,412 17,217,727 23,247,043 271,406,434 332,302,134 419,144,170
TOTAL ASSETS 200,984,413 237,368,200 253,988,696 4,441,317,068 4,479,384,301 4,504,265,115
EQUITY AND LIABILITIES
Capital and reserves
Share capital 18,314,947 18,314,947 18,299,947 244,752,779 244,752,779 244,480,271
Share premium 94,846,046 94,846,046 94,792,516 1,323,632,626 1,323,632,626 1,322,660,134
Translation reserve (77,093,671) (56,402,515) (47,553,353)
Share option reserve 1,035,888 1,035,888 1,223,380 13,957,178 13,957,178 17,189,849
Retained earnings 112,043,676 110,850,201 104,727,781 1,470,428,459 1,452,863,957 1,341,862,736
Realisation of
equity reserve (10,701,093) (10,701,093) (10,701,093) (140,624,130) (140,624,130) (140,624,130)
Merger reserve (10,705,308) (10,705,308 (10,705,308) (154,707,759) (154,707,759) (154,707,759)
Other reserves (140,016) (70,679) (375,464) (3,218,975) (1,364,097) (6,769,609)
Equity attributable
to owners of
the parent 127,600,469 147,167,487 149,708,406 2,754,220,178 2,738,510,554 2,624,091,492
Total equity 127,600,469 147,167,487 149,708,406 2,754,220,178 2,738,510,554 2,624,091,492
Non-current liabilities
Long term
provisions 10,271,027 12,249,367 12,617,747 236,130,911 236,412,781 227,497,973
Long term
liabilities 11,495,041 16,312,982 25,339,623 264,270,992 314,840,546 456,873,408
Deferred taxation 32,667,521 39,288,059 43,234,799 751,026,310 758,259,537 779,523,431
54,433,589 67,850,408 81,192,169 1,251,428,213 1,309,512,864 1,463,894,812
Current liabilities
Trade and
other payables 13,014,779 16,799,043 15,941,132 299,209,765 324,221,523 287,418,606
Current portion
of long term
liabilities 4,247,021 5,047,478 6,309,900 97,639,018 97,416,327 113,767,493
Bank overdraft 443,171 - - 10,188,509 - -
Current tax
liability 1,245,384 503,784 837,089 28,631,385 9,723,033 15,092,712
18,950,355 22,350,305 23,088,121 435,668,677 431,360,883 416,278,811
TOTAL EQUITY
AND LIABILITIES 200,984,413 237,368,200 253,988,696 4,441,317,068 4,479,384,301 4,504,265,115
Note 1: The ZAR figures have been included for illustrative purposes only.
Consolidated GBP and ZAR Statement of Profit or Loss and Other Comprehensive Income
for the period ended 31 December 2015
31 December 31 December 31 December 31 December
2015 2014 2015 2014
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP GBP ZAR ZAR
(note 2) (note 2)
Revenue
Gold sales 73,752,127 65,538,251 1,536,256,799 1,171,168,538
Platinum sales 1,879,907 2,587,645 39,158,461 46,241,219
Realisation costs (269,483) (294,589) (5,613,341) (5,264,311)
On - mine revenue 75,362,551 67,831,307 1,569,801,919 1,212,145,446
Gold cost of production (48,935,400) (52,727,136) (1,019,324,382) (942,233,920)
Platinum cost of production (1,650,617) (1,797,188) (34,382,330) (32,115,757)
Mining depreciation (5,276,624) (4,676,292) (109,912,069) (83,565,346)
Mining profit 19,499,910 8,630,691 406,183,138 154,230,423
Other (expenses)/income (3,486,324) 522,797 (72,620,137) 9,342,380
Loss in associate - (128,217) - (2,291,239)
Loss on disposal of associate - (139,970) - (2,429,880)
Impairments - (56,253) - (1,014,239)
Royalty costs (1,194,397) (794,882) (24,879,297) (14,204,537)
Net income before finance
income and finance costs 14,819,189 8,034,166 308,683,704 143,632,908
Finance income 143,584 321,046 2,990,864 5,737,089
Finance costs (557,976) (498,013) (11,622,650) (8,899,485)
Profit before taxation 14,404,797 7,857,199 300,051,918 140,470,512
Taxation (3,479,954) (2,309,652) (72,487,419) (41,273,479)
Profit after taxation 10,924,843 5,547,547 227,564,499 99,197,033
Other comprehensive income:
Fair value movement on available
for sale investment (69,337) - (1,854,878) -
Other movements - (369,935) - (6,670,040)
Foreign currency translation differences (20,691,156) (8,033) - -
Total comprehensive income for the year (9,835,650) 5,169,579 225,709,621 92,526,993
Profit attributable to:
Owners of the parent 10,924,843 5,547,547 227,564,499 99,197,033
Total comprehensive income attributable to:
Owners of the parent (9,835,650) 5,169,579 225,709,621 92,526,993
Earnings per share 0.60 0.30 12.43 5.42
Diluted earnings per share 0.60 0.30 12.42 5.41
Weighted average number of shares in issue 1,831,494,763 1,829,994,763 1,831,494,763 1,829,994,763
Diluted number of shares in issue 1,831,712,087 1,834,126,382 1,831,712,087 1,834,126,382
Headline earnings per share is calculated:
Basic earnings 10,924,843 5,547,547 227,564,499 99,197,033
Adjustments (note 1):
Loss on disposal of associate - 139,970 - 2,429,880
Impairments - 56,253 - 1,014,239
Headline earnings 10,924,843 5,743,770 227,564,499 102,641,152
Headline earnings per share 0.60 0.31 12.43 5.61
Diluted headline earnings per share 0.60 0.31 12.42 5.60
Note 1: The adjustments accounted for, did not have any taxation impact to the group.
Note 2: The ZAR figures have been included for illustrative purposes only.
Condensed GBP and ZAR Consolidated Cash Flow Statement
for the period ended 31 December 2015
Six months Six months Six months Six months
ended ended ended ended
31 December 31 December 31 December 31 December
2015 2014 2015 2014
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP GBP ZAR ZAR
(note 1) (note 1)
Profits before tax 14,404,797 7,857,199 300,051,918 140,470,512
Summary of adjustments
Royalties 1,194,397 794,882 24,879,297 14,204,537
Depreciation 5,294,975 4,676,292 110,294,337 84,027,336
Impairment - 56,253 - 1,014,239
Gold loan deliveries (1,404,589) (1,795,514) (29,257,585) (32,085,839)
Fair value adjustments and other (434,881) (725,197) (9,058,577) (15,242,762)
Net finance costs 414,392 176,967 8,631,786 3,162,396
Operating profit before working
capital changes 19,469,091 11,040,882 405,541,176 195,550,419
Decrease/(increase) in trade
and other receivables 1,036,728 (1,064,893) 21,595,047 (19,029,641)
(Increase)/ decrease in net inventory (1,238,072) 296,803 (25,789,050) 5,303,877
Decrease in accounts payable (864,687) (1,270,792) (18,011,434) (22,709,057)
Cash Generated by operations 18,403,060 9,002,000 383,335,739 159,115,598
Taxation paid (2,794,359) (1,870,216) (64,242,313) (33,719,995)
Royalty paid (1,040,133) (1,276,984) (23,912,650) (23,024,013)
Dividends paid (9,349,072) (14,283,924) (210,000,000) (258,029,262)
Net finance expense (511,354) (241,484) (10,651,502) (4,315,311)
Cash inflow/(outflow) from
operating activities 4,708,142 (8,670,608) 74,529,274 (159,972,983)
Cash outflow from investing activities (6,191,291) (12,757,686) (128,964,585) (227,979,846)
Cash (outflow)/ inflow from
financing activities (960,154) 20,984,891 (20,000,000) 375,000,000
Net decrease in cash equivalents (2,443,303) (443,403) (74,435,311) (12,952,829)
Cash at the beginning of period 3,328,850 5,618,323 64,246,802 101,186,004
Effect of foreign currency rate changes (1,328,718) (281,233) - -
Cash at end of year (443,171) 4,893,687 (10,188,509) 88,233,175
Note 1: The ZAR figures have been included for illustrative purposes only.
Condensed GBP and ZAR Consolidated Statement of Changes in Equity
for the period ended 31 December 2015
Six months Six months Six months Six months
ended ended ended ended
31 December 31 December 31 December 31 December
2015 2014 2015 2014
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP GBP ZAR ZAR
(note 1) (note 1)
Shareholder's equity as start period 147,167,487 159,396,109 2,738,510,557 2,788,369,869
Share option reserve - 68,489 - 1,223,892
Other comprehensive income (20,760,493) (377,968) (1,854,878) (6,670,040)
Profit for the year 10,924,843 5,547,547 227,564,499 99,197,033
Dividends (9,731,368) (14,925,771) (210,000,000) (258,029,262)
Total Equity 127,600,469 149,708,406 2,754,220,178 2,624,091,492
Note 1: The ZAR figures have been included for illustrative purposes only.
Consolidated GBP Segment Report
for the period ended 31 December 2015
31 December 2015
Corporate
Barberton Evander Phoenix and Growth Funding
Mines Mines Platinum Projects company Group
GBP GBP GBP GBP GBP GBP
Revenue
Gold sales (note 1) 41,011,076 32,741,051 - - - 73,752,127
Platinum Sales - - 1,879,907 - - 1,879,907
Realisation costs (156,470) (113,013) - - - (269,483)
On - mine revenue 40,854,606 32,628,038 1,879,907 - - 75,362,551
Gold cost of
production (22,321,903) (26,613,497) - - - (48,935,400)
Platinum cost
of production - - (1,650,617) - - (1,650,617)
Depreciation (1,805,175) (3,312,213) (159,236) - - (5,276,624)
Mining Profit 16,727,528 2,702,328 70,054 - - 19,499,910
Other(expenses)/
income(note 2) (2,614,480) 115,024 (92,565) (907,176) 12,873 (3,486,324)
Loss from associate - - - - - -
Loss on disposal
of associate - - - - - -
Impairment costs - - - - - -
Royalty cost (1,030,528) (163,869) - - - (1,194,397)
Net income/(loss)
before finance
income and
finance costs 13,082,520 2,653,483 (22,511) (907,176) 12,873 14,819,189
Finance income 59,038 11,964 370 46,287 25,925 143,584
Finance costs 14,621 (14,314) 8,570 (5) (566,848) (557,976)
Profit/(loss) before
taxation 13,156,179 2,651,133 (13,571) (860,894) (528,050) 14,404,797
Taxation (3,294,804) (7,836) 14,408 (191,722) - (3,479,954)
Profit/(loss) after
taxation before
inter-company charges 9,861,375 2,643,297 837 (1,052,616) (528,050) 10,924,843
Inter-company transactions
Management fees (685,079) (447,904) (64,809) 1,197,792 - -
Inter-company
finance costs - (522,381) - - 522,381 -
Profit/(loss) after
taxation after
inter-company charges 9,176,296 1,673,012 (63,972) 145,176 (5,669) 10,924,843
Segmental Assets
(Total assets
excluding goodwill) 47,452,876 122,245,331 8,497,626 1,576,239 211,627 179,983,699
Segmental Liabilities 19,134,430 41,981,878 570,515 62,806 11,634,315 73,383,944
Goodwill 21,000,714 - - - - 21,000,714
Net Assets
(excluding goodwill) 28,318,446 80,263,453 7,927,111 1,513,433 (11,422,688) 106,599,755
Capital Expenditure 2,683,629 3,451,752 38,406 14,402 - 6,188,189
Note 1: All gold sales were made in the Republic of South Africa and the majority of revenue was generated
from selling gold to South African institutions through the group's Funding Company.
Note 2: Other expense and income exclude inter-management fees and dividend received.
31 December 2014
Corporate
Barberton Evander Phoenix and Growth Funding
Mines Mines Platinum Projects company Group
GBP GBP GBP GBP GBP GBP
Revenue
Gold sales (note 1) 39,974,054 25,564,197 - - - 65,538,251
Platinum Sales - - 1,879,907 - - 2,587,645
Realisation costs (224,787) (69,802) - - - (294,589)
On - mine revenue 39,749,267 25,494,395 2,587,645 - - 67,831,307
Gold cost of
production (25,498,210) (27,228,926) - - - (52,727,136)
Platinum cost
of production - - (1,650,617) - - (1,797,188)
Depreciation (1,974,383) (2,518,367) (183,542) - - (4,676,292)
Mining Profit 12,276,674 (4,252,898) 606,915 - - 8,630,691
Other(expenses)/
income(note 2) (388,757) 2,194,174 (32,298) (1,250,322) - 522,797
Loss from associate - - - (128,217) - (128,217)
Loss on disposal
of associate - - - (139,970) - (139,970)
Impairment costs - - - (56,253) - (56,253)
Royalty costs (685,073) (109,809) - - - (794,882)
Net income/(loss)
before finance income
and finance costs 11,202,844 (2,168,533) 574,617 (1,574,762) - 8,034,166
Finance income 169,894 111,577 562 32,743 6,270 321,046
Finance costs (6,448) (18,407) - (11,167) (461,991) (498,013)
Profit/(loss)
before taxation 11,366,290 (2,075,363) 575,179 (1,553,186) (455,721) 7,857,199
Taxation (2,819,986) 769,390 (166,951) (92,105) - (2,309,652)
Profit/(loss) after
taxation before
inter-company charges 8,546,304 (1,305,973) 408,228 (1,645,291) (455,721) 5,547,547
Inter-company transactions
Management fees (833,800) (643,537) (61,555) - 1,538,892 -
Inter-company
finance costs (50,364) (402,910) (5,596) (11,192) 470,062 -
Profit/(loss) after
taxation after
inter-company charges 7,662,140 (2,352,420) 341,077 (1,656,483) 1,553,233 5,547,547
Segmental Assets
(Total assets
excluding goodwill) 62,151,080 156,520,573 12,000,194 2,276,381 39,754 232,987,982
Segmental Liabilities 21,973,563 59,351,154 843,668 1,151,504 20,960,401 104,280,290
Goodwill 21,000,714 - - - - 21,000,714
Net Assets
(excluding goodwill 40,177,517 97,169,419 11,156,526 1,124,877 (20,920,647) 128,707,692
Capital Expenditure 3,128,148 8,819,532 5,596 55,960 - 12,009,236
Note 1: All gold sales were made in the Republic of South Africa and the majority of revenue was generated
from selling gold to South African institutions through the group's Funding Company.
Note 2: Other expense and income exclude inter-management fees and dividend received.
Consolidated ZAR Segment Report for the period ended 31 December 2015 (note 3)
31 December 2015
Corporate
Barberton Evander Phoenix and Growth Funding
Mines Mines Platinum Projects company Group
ZAR ZAR ZAR ZAR ZAR ZAR
million million million million million million
Revenue
Gold sales
(note 1) 854.3 682.0 - - - 1,536.3
Platinum Sales - - 39.2 - - 39.2
Realisation costs (3.3) (2.4) - - - (5.7)
On - mine revenue 851.0 679.6 39.2 - - 1,569.8
Gold cost of production (464.9) (554.4) - - - (1,019.3)
Platinum cost of
production - - (34.4) - - (34.4)
Depreciation (37.6) (69.0) (3.3) - - (109.9)
Mining Profit 348.5 56.2 1.5 - - 406.2
Other(expenses)/
income(note 2) (54.5) 2.4 (1.9) (18.8) 0.3 (72.5)
Bargain purchase - - - - - -
Loss from associate - - - - - -
Loss on disposal
of associate - - - - - -
Impairment costs - - - - - -
Royalty costs (21.5) (3.4) - - - (24.9)
Net income/(loss)
before finance income
and finance costs 272.5 55.2 (0.4) (18.8) 0.3 308.8
Finance income 1.2 0.2 - 1.0 0.5 2.9
Finance costs 0.3 (0.3) 0.2 - (11.8) (11.6)
Profit /(loss)
before taxation 274.0 55.1 (0.2) (17.8) (11.0) 300.1
Taxation (68.6) (0.2) 0.3 (4.0) - (72.5)
Profit(loss)
after taxation 205.4 54.9 0.1 (21.8) (11.0) 227.6
Inter-company
transactions
Management fees (14.3) (9.3) (1.4) 25.0 - -
Inter-company
finance costs - (10.9) - - 10.9 -
Profit/(loss) after
taxation after
inter-company charges 191.1 34.7 (1.3) 3.2 (0.1) 227.6
Segmental Assets
(Total assets
excluding goodwill) 1,090.9 2,810.4 195.4 36.2 4.9 4,137.8
Segmental
Liabilities 439.9 965.2 13.1 1.4 267.5 1,687.1
Goodwill 303.5 - - - - 303.5
Net Assets
(excluding goodwill) 651.0 1,845.2 182.3 34.8 (262.6) 2,450.7
Capital
Expenditure 55.9 71.9 0.8 0.3 - 128.9
Note 1: All gold sales were made in the Republic of South Africa and the majority of revenue was generated
from selling gold to South African institutions through the group's Funding Company
Note 2: Other expenses and income exclude inter-management fees and dividend received.
Note 3: The ZAR figures have been included for illustrative purposes only.
31 December 2014
Corporate
Barberton Evander Phoenix and Growth Funding
Mines Mines Platinum Projects company Group
ZAR ZAR ZAR ZAR ZAR ZAR
million million million million million million
Revenue
Gold sales
(note 1) 714.3 456.8 - - - 1,171.1
Platinum Sales - - 46.2 - - 46.2
Realisation costs (4.0) (1.2) - - - (5.2)
On - mine revenue 710.3 455.6 46.2 - - 1,212.1
Gold cost of production (455.7) (486.6) - - - (942.3)
Platinum cost
of production - - (32.1) - - (32.1)
Depreciation (35.3) (45.0) (3.2) - - (83.5)
Mining Profit 219.3 (76.0) 10.9 - - 154.2
Other(expenses)/
income(note 2) (6.9) 39.2 (0.6) (22.3) - 9.4
Bargain purchase - - - - - -
Loss from associate - - - (2.3) - (2.3)
Loss on disposal
of associate - - - (2.4) - (2.4)
Impairment costs - - - (1.0) - (1.0)
Royalty costs (12.2) (2.0) - - - (14.2)
Net income/(loss)
before finance income
and finance costs 200.2 (38.8) 10.3 (28.0) - 143.7
Finance income 3.0 2.0 - 0.6 0.1 5.7
Finance costs (0.1) (0.3) - (0.2) (8.3) (8.9)
Profit/(loss)
before taxation 203.1 (37.1) 10.3 (27.6) (8.2) 140.5
Taxation (50.4) 13.7 (3.0) (1.6) - (41.3)
Profit/(loss)
after taxation 152.7 (23.4) 7.3 (29.2) (8.2) 99.2
Inter-company
transactions
Management fees (14.9) (11.5) (1.1) - 27.5 -
Inter-company
finance costs (0.9) (7.2) (0.1) (0.2) 8.4 -
Profit/(loss)
after taxation after
inter-company charges 136.9 (42.1) 6.1 (29.4) 27.7 99.2
Segmental Assets
(Total assets
excluding goodwill) 1,120.6 2,822.1 216.4 41.0 0.7 4,200.8
Segmental
Liabilities 396.2 1,070.1 15.2 20.8 377.9 1,880.2
Goodwill 303.5 - - - - 303.5
Net Assets
(excluding goodwill) 724.4 1,752.0 201.2 20.2 (377.2) 2,320.6
Capital
Expenditure 55.9 157.6 0.1 1.0 - 214.6
Note 1: All gold sales were made in the Republic of South Africa and the majority of revenue was generated
from selling gold to South African institutions through the group’s Funding Company
CONTACT INFORMATION
Corporate Office
The Firs Office Building
1st Floor, Office 101
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: +27 (0) 11 243 2900
Facsimile: +27 (0) 11 880 1240
Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office: +44 (0) 20 7796 8644
Facsimile: +44 (0) 20 7796 8645
Cobus Loots Deon Louw
Pan African Resources PLC Pan African Resources PLC
Chief Executive Officer Financial Director
Office: +27 (0)11 243 2900 Office: +27 (0) 11 243 2900
Phil Dexter John Prior/Paul Gillam/James Black
St James's Corporate Services Limited Numis Securities Limited
Company Secretary Nominated Adviser & Joint Broker
Office: +44 (0)20 7796 8644 Office: +44 (0)20 7260 1000
Sholto Simpson Matthew Armitt/Ross Allister
One Capital Peel Hunt LLP
JSE Sponsor Joint Broker
Office: +27 (0)11 550 5009 Office: +44 (0)020 7418 8900
Julian Gwillim Daniel Thöle/Richard Crowley/Aarti Iyer
Aprio Strategic Communications Bell Pottinger PR
Public & Investor Relations SA Public & Investor Relations UK
Office: +27 (0)11 880 0037 Office: +44 (0)20 3772 2500
www.panafricanresources.com
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